Relief – it looks like a compromise at last

The Employment
Agencies Act is a very important piece of legislation for the recruitment
industry. Nearly two years ago, when the Government produced its first
consultation paper, it underestimated the scale of our operations and our
social and economic contribution. Simply expressed, the industry finds jobs for
people and people for jobs. With an annual turnover in excess of £18bn, 1
million temporary workers on agency payrolls in any given week, and half a
million permanent placements annually, it is clearly important and useful.

What a pity that the first
draft of the Act painted us in "big bad wolf" colours and contained
regulations that were unacceptable and unworkable. The industry and the
Government have been on a collision course for 20 months, one feeling
misunderstood and threatened, the other, presumably, on a crusade to
"clean up" recruitment.

After strenuous lobbying, the
Government has finally recognised the industry’s worth. Substantial revisions
have drawn the sting and added clarity. Agencies – not all, but most – have
accepted that compromise is necessary.

The single issue that generated
more heat than light was the temp to perm fee. When an agency supplies a
temporary worker and the hirer subsequently takes that temp on as a permanent
employee, the agency charges an introduction fee. The cost of attracting,
assessing, briefing, administering and preparing the worker is considerable. If
the worker is lost to the agency after a couple of weeks, that cost is not recovered.

The first draft regulations
banned temp to perm, and the next draft proposed a four-week
"quarantine" period, which was almost as bad. And now? We have 14
weeks from the start of each assignment during which, if a temp is made permanent,
the agency can charge a fee.

The regulation needs
clarification, but generally, agencies will feel able to continue to invest in
their workers. The economy needs every worker it can get.

What else is new? Agencies
supplying HGV drivers were caught between two pieces of legislation, which in
effect made their operations illegal. The new draft exempts them, so they can
continue their work.

Agencies supplying limited
company contractors have some relief from the initial proposal that gave them
no way to protect their longer-term interests in their contractors. Rules
concerning the checking of references in the nanny, care and nursing sectors
have been tightened – no bad thing if sensibly applied. Clarification that
temps can be used to replace workers on unofficial strike is given. There are
new rules on the timing of providing contracts to temps, which we need to
consult on carefully.

On the whole, our first
reaction is one of relief. It looks as if we can live with this, although we
are not exactly dancing in the streets. We are consulting our members, and will
respond officially before the 16 March deadline.